[PEN-L:12012] Re: equity premium puzzle

[Doug Henwood <dhenwood@xxxxxxxxx>]

James Devine wrote:

>Thus premium is not just for volatility--but also for utility preferences
>for avoiding volatility.

That's a very fine distinction. Can you explain how it matters?

And I won't even ask how it is that reality conveniently provides the
increased returns in accordance with CAPM convention. I'm just assuming
that the invisible hand reads the rulebook.

Doug